Appearing on The AM Show on Thursday, Mr Jones says we're "the only country in the world that allows our logs to be wholesale exported in the way we do" - and made it clear the expectation now is for wood to be largely processed in New Zealand.

"I was very, very frank with them, that we value the opportunity to be economic partners... but the voters and communities in Gisborne and places like that, they want to see those logs now substantially processed in New Zealand," he told host Duncan Garner.

"I don't know of a single Kiwi who says to me, 'Gosh, I'm proud that all the logs at the back of the Cake Tin in Wellington or at Gisborne, they're all going away in raw undeveloped form'."

Mr Jones says China is already making one investment in the Bay of Plenty, but they are concerned there are not enough logs for expanding their activities.

"They themselves are fearful that if they put hundreds of millions of dollars into processing in New Zealand... will they have certainty of supply?" he says.